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  • Writer's pictureКущ Олексій

Corruption is an institutional trap, a system in which it is difficult for anyone to change the norm

Institutional trap. Another one.

Our Western partners are wondering why Ukraine does not initiate negotiations on debt relief.

What is it waiting for?

The end of the war?

Well, then, no one will write off anything.

In fact, a significant part of our political "elites" are in debt: foreign and domestic.

The most correct "guys" are sitting in GDP warrants.

How can they vote to write off part of their assets and lose millions of dollars?

It's like cutting your fingers...

This is the real reason, and all the talk about "civilized countries paying off their debts" is a fairy tale for the poor.

Tell that to Germany, which was forgiven its debts after World War II, or to Poland, which also had tens of billions of dollars written off on the eve of joining the EU.

It's just that German politicians in the Adenauer administration were not in public debt.

Neither did Balcerowicz, the finance minister under President Walesa.

The story with the progressive income tax on high incomes is exactly the same.

How can MPs vote for additional taxation of their sponsors? Or themselves?

By the way, Polterovich once wrote about institutional traps:

"Let's look at another example of an institutional trap: the corruption trap.

Imagine that you live in a system where everyone is involved in corruption.

You can't get out of this system, at least for you it is associated with very big troubles:

You find yourself outside the community, you cannot interact with your colleagues, they look at you as an outsider.

In addition, you lose purely financially.

Corruption is an institutional trap, a system in which it is quite difficult for everyone to change the norms of behavior.

We are constantly seeing new institutional traps emerge, and each time we face the challenge of how to get out of them.

For example, we have a flat income tax.

Many economists believe that such a tax is not effective because it increases inequality.

Inequality is useful and necessary to a certain extent, but excessive inequality is harmful, if only because it leads to mass discontent and social explosions.

Today, public opinion is increasingly inclined to believe that the flat tax should be gradually replaced by a progressive tax.

But how can this be done?

The decision to reform personal income taxation must be made by the parliament.

But parliamentarians are not the poorest people. And even if a moderate progressive tax is introduced, it will hit them first and foremost."

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